Aid flow declines sharply

It has been a difficult fiscal year for Bangladesh as far as the availability of external assistance for funding its development programmes is concerned. Disbursement of external assistance, both grants and loans, stood at Taka 29.42 billion in the first half of the current fiscal (2010-2011) compared to Taka 75.59 billion in the corresponding period of the last fiscal. The situation is all the more disconcerting about the flow of external grants. It showed a dramatic fall of disbursement of such grants to Taka 27.88 billion between July and December, 2010 against Taka 66.55 billion during the corresponding period of 2009. This reflected how tight the situation is becoming about availability of external grants. The disbursement of external loans has also not been encouraging either. Against the availability of Taka 51.72 billion in the first half of the fiscal 2009-2010, such loans, in terms of disbursement, amounted to Taka 27.88 billion between July and December, 2010. It may be mentioned here that external debt serving accounts for a significant amount of financial repayments, impacting the net availability position about external assistance. Such debt serving (both debt amortisation and interest payments including service charges) amounted to Taka 22.94 billion in the first half of the current fiscal against Taka 23.87 billion during the corresponding period of the last fiscal. As such, the net availability of external assistance for Bangladesh aggregated at Taka 6.48 billion between July and December 2010 against Taka 51.72 billion during the corresponding period of fiscal 2009-2010. Against this backdrop, the government of Bangladesh and the World Bank (WB), one of the leading donor agencies, had a meeting on 'Joint Country Performance and Results Review (CPRR)' this week in Dhaka. This was the first annual review for the World Bank Country Assistance Strategy (CAS) for Bangladesh covering fiscal years from 2010-11 to 2013-14. The outcome of the review meeting has been noted the WB in a press release. According to the press release, the government and the WB jointly conducted the first annual review of progress toward results under World Bank-supported programmes and operations. This review was unusual in going beyond a focus on implementation processes to assess whether development outcomes are being achieved and whether more can be done to manage for results. "The review", the press release adds, "found good progress towards results following approval of the Country Assistance Strategy in July 2010, with a record $6.2 billion in planned commitments for FY11-14. The World Bank has contributed to positive outcomes in areas such as increasing educational enrolment, improving health status, expanding renewable energy, promoting public-private partnerships and providing critical infrastructure like rural roads and water supply." The Bangladesh Minister of Finance A. M. A. Muhith was reported to have commended the WB at the review meeting for its increasing openness. Last year, the World Bank conducted consultations throughout the country to hear from Bangladeshis about its (Bangladesh's) challenges and priorities, and then launched the CAS to the general public. One year on, the WB, as it stated, is trying to carry through with increased transparency and accountability in delivering development results in Bangladesh. To ensure better outcomes, the WB's strategy, according to its press release, seeks to scale up on-going operations with demonstrable results, engage in larger, more strategic interventions with a transformative impact and innovate through small pilots with high country ownership. "A results framework that includes a manageable set of indicators and measurable targets is embedded in the strategy. This year's review of progress toward results found that most milestones were on-track", according to the WB. However, lack of progress data, according to the WB, hampered a full assessment nearly half the time. The reviews showed that Government and development partners need to strengthen systems and capacity to monitor progress toward results to ensure that their joint actions are leading to desired outcomes in terms of poverty reduction, economic growth and social welfare. This was reported to have been noted by Ellen Goldstein, World Bank Country Director in Bangladesh. "Going forwards, the Bank will devote additional resources to data development and strengthening monitoring and evaluation systems at the programme, sector and country level", she said. Managing for development results (MfDR), according to the WB press release, requires a change in mindset among donors and developing countries to balance day-to-day implementation concerns with a long-term focus on outcomes. "In preparing the Sixth Five-Year Plan, Government is incorporating a development results framework which will make it easier to monitor progress toward the goals of the Plan. The World Bank is working with Government to make this results framework a tool for better aligning foreign assistance to country priorities", it observed. In his opening remarks at the review meeting, Dr. Mashiur Rahman, Economic Adviser to Prime Minister, reportedly stressed the need for enhancing implementation and outcomes of World Bank support in order to have a positive effect on government's Annual Development Programme (ADP), given the importance of the Bank as a long-term partner of Bangladesh. "A stronger focus on results and building the tools to measure, monitor and manage for results will increase the effectiveness of our public investment", Dr. Mashiur Rahman, according to the WB press release, noted at the review meeting. The WB's CAS for Bangladesh, to note here, is supporting Government's vision of rapid poverty reduction and middle income country status through accelerated, sustainable and inclusive growth, underpinned by stronger governance at central and local levels. Its portfolio in Bangladesh amounts to US$ 4.8 billion and includes 28 projects. In the wake of the review meeting and also in the light of its stated outcomes, all concerned would now expect that the external aid disbursement situation for Bangladesh would show some steady improvements. The areas of action for that to happen, have been identified to a meaningful extent at the meeting. It will be more appropriate now to make all possible efforts at the earliest by all sides concerned in order to link aid disbursements more effectively with outcomes, particularly in terms of people's socio-economic well-being on a sustained basis.